Paper Lodgement process
Traditional use of Direct Debit involves the sending of the paper Direct Debit Instructions to the payers bank for lodgement. Often referred to as non-AUDDIS.
The paper lodgement process is:
The Payer completes the paper Direct Debit Instruction (DDI) and returns it to the service user.
The service user enters the DDI data onto their system, collates the DDI’s and sends the paper copies to the paying banks by post. DDI’s are either forwarded to the bank or building society that the payer lists as their home bank, or a central processing centre. Paper DDIs must be sent to the bank for lodgement within 6 months of the date that they are signed by the payer.
Instructions are received by the paying banks and lodged against the payers bank accounts. Each DDI will be registered as a single authority given by the payer for the collection of a Direct Debit by the service user.
Paper Lodgement timing
The service user must allow a number of working from date of despatch allowing the payers bank time to action the DDI before the first collection is presented. The default for this is 10 working days.
Paper Lodgement failures
If the bank cannot lodge the Direct Debit Instruction, lodgement failures should be returned immediately or within 3 working days of receipt from the paying bank. Often however, lodgement failures may only be identified at first collection (unpaid collections). The paying bank reserve the right to refuse lodgement without giving a reason, however there are a number of reasons why DDI’s might fail:
- Invalid sort code
- Invalid account type
- Invalid instruction
- Account not held / closed
- Account name differs
- Insufficient / invalid account details
- Direct Debits not permissible on this particular account
- Lodgement refused
- No reference
- No signature
Paper lodgement: flowchart
The diagram below illustrates the paper lodgement process: